can price action predict market moves

[geth03]

Define 'price action'. Note that charts are just a visualization of the underlying numbers and one specific way to perceive those numbers.

If you were to build and test a predictive model it would not be based on charts, fundamentally.

Jim Simons spent about a decade, I think, before finally arriving at something worthwhile.

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yeah, when Simons started looking at data in the 80's i guess, mean reversion in currencies was a good way of making money.

Price action can mean different things to different people, thats true. but i think all will take some sort of price-time-volume relationship as an input to some kind of a model.
lets take mean reversion: price makes an extended move to one side far away from some kind of fair value (moving avrg, vwap ...) within a short amount of time, here you have price-time-volume as an input.

 

[Scataphagos]

Scat you often think someone is responding to you when they aren't ....relax amigo.

Why don't YOU relax. I didn't think you were responding to my post.

 

[Laissez Faire]

Price action can mean different things to different people, thats true. but i think all will take some sort of price-time-volume relationship as an input to some kind of a model.

That's a very simplistic way of looking at it.

When people talk about 'price action' I interpret that as a visualization of the OHLC data (bars) in various timeframes/settings and further analysis of that data either through a naked chart or with indicators applied to it.

But regardless how you look at it you're still looking at raw data only.

 

[jsp326]

Yep. And Al Brooks and a number of "price action only" forum gurus make untold zillions trading this way. Just don't ask for account statements or any other form of proof.

 

[bone]

You're looking at markets in isolation as monogamous entities, which is a big mistake. You need to understand what's actually driving order flows.

hi all,

price moves because buyers and sellers interact with each other, continuously.
for price moves, it is irrelevant why market participants trade (i mean trade intension here), one side can be a short term scalper, daytrader, or a hedger, the other side can be a longterm investor.
they interact, and based on limit and market orders the price moves.

i know, some guys analyze the interaction of market participants. be it a pure bar chart with or without any indicator, or the trading DOM. the trader seeks to find an answer to which side is more dominant.

is there really a value in analyzing the interaction of sellers and buyers trade by trade or bar by bar?
some will say "yes, of course. you can see hidden orders, absorption, size entering the market ..."
my experience is somewhat different.

i think, it doesn't f..cking matter. i have seen many many times in the DOM, that if one iceberg order appears, there will be other market orders that will hit this order aggressively. which side the market will move next is a 50/50 coin flip. iceberg orders doesn't f..cking matter!

i used the jigsaw reconstructed tape for monthes to see size entering the market to catch moves before they happen. i could not find any edge with that. when size enters the market, it will drag the market up or down, but thats it. on the recontape you see what happened, there is no guarantee of follow through.

next comes the bar chart: i think the bar chart is a good tool to see how price moved from A to B, and how volatile price was within the bar period. i don't think there exist any bar to bar relation, it is 100% random.

i want to address one other issue, too.

give the technical trader a chart, and he will start drawing f.cking patterns and lines on it and draw scenarios: 1.scenario: if price breaks and retest, enter. 2.scenario:if price fails to breakout on good volume, fade the breakout when price bar closes back within range. .....

most technical traders do not even know what the underlying markets represent.
the technical trader will trade the ES like he trades CL.
The ES represents underlying stocks. there can be 500 reasons why ES moved 10 points within 1 minute or why one 100 lot market order moves the market and then the other 100 market order does nothing. it can be a hedge, margin call, options related, stop run, something related to one sector, arbitrage, intermarket correlation.
it can be something that just lasts for a minute, for 5 maybe.

my point is, i think previous price action might be useful, BUT it might also not be useful at all. making trading decisions based on what happened is a 50/50 coin flip IMO.

 

[murray t turtle]

%%
It is fake\the idea of market prediction. But some get good @ weather forcasting; but that tends to be seasonal........................................................................

 

[geth03]

You're looking at markets in isolation as monogamous entities, which is a big mistake. You need to understand what's actually driving order flows.

Lol thats the one gazilion million billion dollar question,
How the fuck do you know who is doing what at what time?

In globex session ES and EU50 move in tandem,
Most of the time in cash session ES moves in relation to NQ and RTY and YM, based on the underlyings.
Do you think that there is an edge in looking at bar chart when underlyings give a mixed picture?
Do you really think that ES will trend because of a breakout or trend pattern or special moving avrg crossover, meanwhile the information tech, consumer discr. And other high weight sector is not healthy on that day?

 

[geth03]

Yep. And Al Brooks and a number of "price action only" forum gurus make untold zillions trading this way. Just don't ask for account statements or any other form of proof.

Al brooks is like the head of a conservative, private church. You dont ask, you just follow.
And he wrote those really complex books, that even he does not understand. And those are their bibles.

 

[bone]

Inter Market Correlation Analysis.

Lol thats the one gazilion million billion dollar question,
How the fuck do you know who is doing what at what time?

In globex session ES and EU50 move in tandem,
Most of the time in cash session ES moves in relation to NQ and RTY and YM, based on the underlyings.
Do you think that there is an edge in looking at bar chart when underlyings give a mixed picture?
Do you really think that ES will trend because of a breakout or trend pattern or special moving avrg crossover, meanwhile the information tech, consumer discr. And other high weight sector is not healthy on that day?

 

[jsp326]

Al brooks is like the head of a conservative, private church. You dont ask, you just follow.
And he wrote those really complex books, that even he does not understand. And those are their bibles.

Nah, he's much more like a woke SJW know-it-all.